PGW - PGG Wrightson

[nztx]

Bit of rarity in these times to see divvy being paid into your bank a/c...thanks PGW!

Agreed there - very good to see in line of Co's that have either cancelled, deferred or not declared a usual dividend

[DarkHorse]

Agree Balance. The strong companies coming out of this terrible situation are primary producers of clean and healthy food and their suppliers. Sadly, for a country growing a wide and abundant variety of good food, there is an appalling lack of options to invest in these on the NZX. A few months ago an idea of an index of primary producers was floated but then nothing happened. Now is the time for this.
My NZX portfolio is now 55% in this sector incl a bit of PGW

I agree on both counts. What are you other favourites in the sector?

[iceman]

I agree on both counts. What are you other favourites in the sector?

Sadly we don;t have enough choice for a country that is a huge producer of primary product. I'd say any diversified investment into this sector now is a good bet with the World needing the product and NZ$ weakness likely to be favourable.
There are some very good companies listed that would fit into this category.
My focus is and has been on SAN, ATM, SEK, PAZ (on the unlisted) and no doubt Fonterra should be on this list but I've never done research into them as I've never been interested in them (Fonterra) for some reason.
I personally have taken a big punt on PAZ and have been buying into SEK again and very tempted to start buying into SAN again. Have held both SEK and SAN for many years but sold out of both 1-2 years ago. I obviously also like PGW which should benefit from strong agriculture rebound.

This is most certainly not an advice by any stretch of the imagination, just ponderings.

[Snoopy]

From p17 in PGW AR2019"

"Innovation continues to be a focus for the Livestock team with a major project coming to fruition during the year. PGW’s new online livestock trading channel, bidr®, was delivered to market during the last quarter of FY2019. bidr® has the potential to be a gamechanger in the livestock trading market with strong interest from the industry to date. In addition, digital tools for the highly mobile Livestock team were delivered throughout the year to keep agents up to date with the latest market intelligence."

This looks like PGW have something equal to 'StockX' in their arsenal already. PGW have an additional advantage in that they are able to provide in house finance via their GoBeef and GoLamb programs. More information on StockX is here:

https://www.nzherald.co.nz/farming/n...ectid=11856447

I see Heartland are financing purchases through StockX. That will anger PGW who had signed up with Heartland to do all of their financing through Heartland owned "PGG Wrightson Finance". However, with PGW setting up their own in house finance operation again under another name (GoBeef and GoLamb) it is no less a competition challenge than PGW management deserve.

"The soundness of purchases is helped by StockX's secure online environment, standardised descriptions for each class and category of livestock, funds settled through an independently audited trust account and user-based feedback on buyer and seller completed transactions"

Is there a way outsiders can follow the 'user based feedback' so we can judge how well this new platform is going?

For PGW shareholders who don't know, there is a radio program called 'Rural Exchange' that plays on the Magic Radio talk network from 6am to 8am every Saturday and Sunday. It is also available as a podcast I believe.

The head of PGW Livestock was interviewed this morning and gave some insight on how 'Livestock' in general and "bidr®" in particular is going.

Sheep are selling well but cattle less so. A problem with cattle is that although they meat works are still open, the killing chain capacity is typically only 25% of what it was for cattle, due to Covid-19 separation requirements. Thus there is a problem with 'booking cattle in' and that means many cattle that would have gone to the works are still on the farm consuming feed. That means that at a farmer level, there is much reduced demand for cattle.

The "bidr®" platform has seen a 43% increase in agents signing up to in in the last couple of weeks. The platform has been opened up to non-PGW stock agents for the term of the lock down.

SNOOPY

[kiora]

Allied farmers have had their own platform for a few years
https://mylivestock.co.nz/

[Balance]

For PGW shareholders who don't know, there is a radio program called 'Rural Exchange' that plays on the Magic Radio talk network from 6am to 8am every Saturday and Sunday. It is also available as a podcast I believe.

The head of PGW Livestock was interviewed this morning and gave some insight on how 'Livestock' in general and "bidr®" in particular is going.

Sheep are selling well but cattle less so. A problem with cattle is that although they meat works are still open, the killing chain capacity is typically only 25% of what it was for cattle, due to Covid-19 separation requirements. Thus there is a problem with 'booking cattle in' and that means many cattle that would have gone to the works are still on the farm consuming feed. That means that at a farmer level, there is much reduced demand for cattle.

The "bidr®" platform has seen a 43% increase in agents signing up to in in the last couple of weeks. The platform has been opened up to non-PGW stock agents for the term of the lock down.

SNOOPY

Thanks, Snoppy - useful information.

Talked to my Waikato farmer friend - he has been happy when prices for beef plummeted during Dec 2019 - Feb 2020 to keep his remaining 'kill' animals and left them on his farm. Plenty of feed around and he laughed when I asked him about the drought - no drier than usual in summer was his reply except that it arrived several weeks earlier - they are prepared for the dry spell.

Demand from China has picked up again for beef, meat companies like Affco have exhausted their frozen inventory.

[sb9]

Just an observation, the seller at 1.90 with more than 200k+ volume on offer over past week seem to be almost filled in. Wonder would they drop in more volume at that price??

[Balance]

Just an observation, the seller at 1.90 with more than 200k+ volume on offer over past week seem to be almost filled in. Wonder would they drop in more volume at that price??

They haven't and if NZ gets out of the lockdown in 2 weeks' time, PGW will be one of first companies to benefit substantially - our agriculture sector is going to do well supplying food to the rest of the world.

[tim23]

They haven't and if NZ gets out of the lockdown in 2 weeks' time, PGW will be one of first companies to benefit substantially - our agriculture sector is going to do well supplying food to the rest of the world.

The market thinks you are right today!

[Balance]

The market thinks you are right today!

And think of all that billions of dollars currently sitting in cash looking for a better than 1% or 2% return post the lockdown.

PGW will be irresistibly attractive with its fully imputed gross dividend yield of over 10%+!